For the typical investor money is often put into one place. Countless of people are now investing into cryptocurrencies, and therefore this post is dedicated to how crypto can be used in ones portfolio while not risking too much.

Putting all money into one place, either if it is the mattress or the bank account, is relatively high risk and not very easy to handle. A lot of people seek quick and high returns on their investments. There are plenty of opportunities to grow capital with high returns (and often times quickly), however, these come with increased risk. Therefore the time horizon of the money invested should be planned out.

When investing in anything, weather currency, crypto, stocks, businesses, or bonds, diversification becomes important to decrease risk taking. Somebody who is willing to take higher risks could diversify less and focus on only a few investments, while somebody who does not want to take high risks could diversify more and thereby decreasing risks. Putting all money into a volatile asset such as crypto is risky since the asset class is volatile at the moment.

Crypto can however be used as part of a portfolio where other assets are included. In this way the risk associated with crypto can be reduced and potential gains will not go missed. How large part of a portfolio that crypto should consist of may vary from portfolio to portfolio, however, precautions should be taken when investing more than 5% of one’s portfolio into crypto.